Zuckerberg's testimony left lawmakers just as concerned about libra as they were beforehand

Key Points
  • Members of the House Financial Services Committee questioned Facebook CEO Mark Zuckerberg over six hours about the company's cryptocurrency plans.
  • After the hearing, several members expressed dissatisfaction with Zuckerberg's testimony.
  • "I don't think it's going to be that independent if Facebook has such control and it's their platform," says Rep. Sylvia Garcia, D-Texas.
Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images

WASHINGTON — Six hours after lawmakers began grilling Facebook CEO Mark Zuckerberg on his cryptocurrency plans, House members from both sides of the aisle expressed dissatisfaction with the lengthy testimony.

Zuckerberg took questions from the House Financial Services Committee on Wednesday, three months after David Marcus, Facebook's cryptocurrency chief, failed in his testimony to give politicians confidence that the company would wait for a regulatory structure before launching its libra project.

The committee's top Republican, Rep. Patrick McHenry, didn't see much advanced by Zuckerberg.

"Frankly, I'm not sure that we've learned anything new here," the lawmaker from North Carolina said as the Facebook CEO wrapped up his testimony.

That view was shared by several committee members, who had called on Zuckerberg to testify about the company's plans with libra.

Facebook announced plans in June for libra to transform the way money moves around the world and said it would be run by a nonprofit association supported by a range of companies and organizations. It announced last week the 21 members of the crypto project as the group met in Switzerland to sign onto the Libra Association charter, which will govern the cryptocurrency.

But on Wednesday, Zuckerberg struggled to satisfy House members, who are concerned about regulation and the governance structure surrounding libra.

Facebook's Mark Zuckerberg testified on Project Libra — Here are some key moments

"We need to get together and we need to basically review what happened here today and make some decisions about how we go forward with the strategy," Chairwoman Maxine Waters, D-Calif., told reporters after the hearing.

Facebook did not immediately respond to a request for comment. Investors weren't bothered, as Facebook shares climbed more than 2% through Zuckerberg's testimony. Zuckerberg did offer several defenses for libra though, arguing that if a U.S. company doesn't build a better digital payments system first, a company from China will instead. He also said libra would help millions of people in the U.S. who don't have access to a bank account.

Prior to the hearing, there were indications that Zuckerberg would hold back from making firm commitments about the project. After the Libra Association's unveiling last week, Marcus told reporters that Zuckerberg wouldn't be able to speak for the association itself.

In his prepared testimony, Zuckerberg made commitments only for Facebook's involvement in the association and said that if the group wanted to launch the currency without U.S. regulators' approval, Facebook "would be forced to leave" it. Zuckerberg noted at least three separate times during the hearing that he could not speak for what he called the "independent" association, which includes Marcus as a board member.

"I'm not sure that we learned too much more new, except now that they're calling the association an independent association," Rep. Sylvia Garcia, D-Texas., said in an interview following the hearing.

Garcia had been one of the lawmakers calling for Zuckerberg's testimony on libra. Although she was "disappointed" with his answers, Garcia said she still believes Zuckerberg was the right person to call in because "Facebook is Mark Zuckerberg and Mark Zuckerberg is Libra."

Garcia said she's skeptical of the idea that the entities are separate.

"I don't think it's going to be that independent if Facebook has such control and it's their platform," she said.

Throughout the hearing, committee members urged Facebook to pause its plans while lawmakers come up with new rules for regulators, or to simply move the Libra Association from Switzerland to the U.S.

Waters said she can't support the plan at all.

"I asked for a moratorium on libra. And what he committed to is they will not launch it until there is a regulatory oversight agency that is responsible for it," Waters said after the hearing, adding that she's "not so sure" that's the same thing.

She said she doesn't understand what libra is trying to accomplish and that it hasn't been "adequately explained."

"To simply say that you're organizing Libra because you're concerned about the unbanked and it's going to have payments systems does not answer the questions for me," Waters said.

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WATCH: Have to keep working on our concerns about libra and Facebook: Rep. Waters

Have to keep working on our concerns about libra and Facebook: Rep. Waters